SECP initiates action against 23 international NGOs

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has initiated action against 23 international NGOs to strike them off the register of companies.
They have failed to file their audited accounts despite several notices and therefore are presumed to be dormant.
When ‘The News’ contacted the SECP, it was reluctant to share the list of those NGOs who failed to submit their audited accounts. An official said that if they made the list public, a huge pressure will come upon them, however the action will be taken against them.
The SECP’s exercise to scrutinize the working and accounts of local NGOs has been extended to the international NGOs. In this regard, show-cause notices were issued to all international NGOs that had not filed annual accounts and other overdue returns with the relevant registrars. Based on response of the INGOs regarding these notices and the record already available with the SECP, the state of compliance of the INGOs has remained unsatisfactory.
Of the total 33 international NGOs registered with the SECP as foreign companies, 23 were found delinquent. Now, the SECP has approved action in terms of section 439 of the 1984 Companies Ordinance to strike names of these international NGOs off the register of companies.
The list of defaulting international NGOs has already been shared with the Economic Affairs Division and the Ministry of Interior for information and necessary action.
Meanwhile, owing to the facilitation and enforcement actions of the Securities and Exchange Commission of Pakistan (SECP), the public sector companies’ compliance with the 2013 Public Sector Companies (Corporate Governance) Rules has improved to 37 percent by June 30, 2015, up from 14 percent during the last year.
The SECP had issued the 2013 Public Sector Companies (Corporate Governance) Rules with the approval of federal government. Under the rules, all the PSCs are required to submit a statement of compliance along with their annual reports. The statement has been prescribed to set out the status of compliance with different provisions of the rules including, inter alia, ensuring a balanced composition of BODs through induction of independent non-executive directors, separation of the offices of the chairman and chief executive, formulation of significant policies of the PSCs, performance evaluation, formation of specialized board committees, enhanced transparency and disclosure requirements, etc.
After the issuance of the rules in 2013, the SECP initiated a comprehensive programme to enhance awareness about public sector companies’ (PSCs) statutory compliance obligations. The activities undertaken included issuance of compliance notices and alerts to companies, holding of seminars, workshops and conferences in collaboration with development partners, issuance of compliance guidelines, issuance of clarifications and guidance to the PSCs and line ministries, etc.
In the wake of the aforesaid actions of a softer and persuasive nature, the
SECP exercised its regulatory powers by taking cognizance of defaults committed and issued show-cause notices to 158 PSCs, under intimation to their line ministries. These companies had failed to submit the statement of compliance for the year ending June 30, 2014. Following the issuance of notices, a total of 59 PSCs have filed statement of compliance by June 30, 2015.